Stocks have moved mostly lower in morning trading on Wednesday, extending the downward move seen over the two previous sessions. With the drop on the day, the S&P 500 has fallen to its lowest intraday level in a month.<\/p>\n
The major averages have seen further downside in recent trading, hitting new lows for the session. The Dow is down 242.50 points or 0.7 percent at 34,026.66, the Nasdaq is down 217.97 points or 1.6 percent at 13,171.46 and the S&P 500 is down 38.76 points or 0.9 percent at 4,113.34.<\/p>\n
The continued weakness on Wall Street reflects concerns about the accelerating pace of inflation following the release of the Labor Department’s report on consumer prices in the month of April.<\/p>\n
The Labor Department said its consumer price index climbed by 0.8 percent in April after rising by 0.6 percent in March. Economists had expected consumer prices to inch up by 0.2 percent.<\/p>\n
Excluding food and energy prices, core consumer prices also advanced by 0.9 percent in April following a 0.3 percent uptick in March. Core prices were expected to rise by another 0.3 percent.<\/p>\n
The much bigger than expected jump in core consumer prices reflected the largest increase since April of 1982.<\/p>\n
With the much bigger than expected monthly increase, consumer prices in April were up by 4.2 percent compared to the same month a year ago, reflecting the biggest jump since September of 2008.<\/p>\n
Core consumer prices also surged up by 3.0 percent year-over-year, marking the biggest annual increase since January of 1996.<\/p>\n
The significantly faster price growth has raised concerns about the outlook for monetary policy even though the Federal Reserve has repeatedly downplayed the risks of inflation.<\/p>\n
The Fed has indicated that it won’t begin tightening monetary policy until inflation is moderately above its 2 percent target for “some time.”<\/p>\n
Semiconductor stocks have shown a substantial move to the downside in morning trading, dragging the Philadelphia Semiconductor Index down by 3 percent.<\/p>\n
Networking, computer hardware and software stocks are also seeing significant weakness, contributing to the steep drop by the tech-heavy Nasdaq.<\/p>\n
Considerable weakness is also visible among housing stocks, as reflected by the 2.1 percent slump by the Philadelphia Housing Sector Index.<\/p>\n
Retail, steel, and airline stocks are also seeing notable weakness, while energy stocks are bucking the downtrend amid a sharp increase by the price of crude oil.<\/p>\n